Confidence Remains Low, but With Bright Spots: Survey

Finance professionals grew more optimistic about the global economy even as their predictions for their own firms in the fourth quarter dimmed, according to the forthcoming Global Economic Conditions Survey conducted by the Association of Chartered Certified Accountants and the Institute of Management Accountants.

Though the movements in sentiment are slight, it is “unusual” for confidence about one’s company and confidence about the global economy to diverge, the groups noted. The last time the two measures diverged was in early 2010, “when the global recovery first started running out of steam,” which the groups said could suggest that the respondents understand their own challenges but have yet to appreciate the troubles facing their peers.

In the fourth quarter, 43% of respondents reported declining confidence in their employers, up from 41% in the third quarter, while just 19% said confidence was rising, unchanged from the prior survey. About 30% now see the global economy as improving, up from 29%, according to the survey, which is slated to be released on Thursday.

Still, 65% of those surveyed said the economy is at best stagnating, although that is down from 67% previously. And companies continued to report increased problems in securing prompt payment and more concern about their customers or suppliers going out of business.

“The portents for the new year are poor, with fundamentals still deteriorating in much of the world,” the study concluded. On the other hand, the ACCA and IMA said that more respondents are becoming convinced that Europe can successfully resolve its sovereign-debt crisis, the Chinese economy won’t have a “hard landing” and that problems like the U.S. debt ceiling will be effectively handled by policymakers.

Of the 1,994 global participants in the survey, 640 were senior managers or directors, including 154 financial chiefs.

Deloitte's Financial Reporting Alert discusses certain key accounting and financial reporting considerations related to the current economic conditions in the eurozone and Puerto Rico, including a summary of financial reporting implications that would result from a country's decision to exit the eurozone and an outline of disclosures recommended by the SEC in 2012 about European sovereign debt.